By John Stang
The Vermont Public Utility Commission (VPUC) on Thursday approved the sale of the retired Vermont Yankee nuclear power plant from owner Entergy to a New York company for decommissioning.
The three-person panel authorized an amendment to the 2002 certificate of public good regarding the ownership and operation of the single-reactor facility. This was the final regulatory approval needed for the deal to go through, following approval by the U.S. Nuclear Regulatory Commission in October.
In a press release, VPUC said the state would benefit most crucially from a pledge by incoming owner NorthStar Group Services to cut the time for decommissioning and site restoration at Vermont Yankee by over three decades.
“We are satisfied that approving the transfer and moving forward with the accelerated cleanup schedule for the Vermont Yankee site is in the best interests of the people of Vernon and the State of Vermont,” Commissioner Margaret Cheney said in the release.
In its own press release, Entergy said: “The PUC’s decision is another milestone toward the safe, timely, and efficient decommissioning of Vermont Yankee, which would be a positive outcome for the Town of Vernon, Windham County, the State of Vermont and other stakeholders. In addition, Entergy is continuing to fulfill its corporate strategy of exiting the merchant nuclear power business. “
The New Orleans-based power company retired the power plant in December 2014 after 42 years of operation. In 2016, Entergy announced its intention to sell the site to demolition and decommissioning specialist NorthStar. The state and federal regulatory process began the next year.
A new NorthStar subsidiary, NorthStar Vermont Yankee, would decommission the reactor, restore the site, and manage its spent fuel. NorthStar says it can complete decommissioning and site restoration as early as 2026, and no later than 2030, compared to the prior Entergy cleanup schedule that stretched on as late as 2068, the state commission noted.
NorthStar CEO Scott State said the sale is expected to close in early January, with decommissioning to crank up through 2019. “It’s been kind of a long process, but it was a good process,” he said.
The companies had hoped to complete the deal by the end of 2018, but the state and federal approvals took longer than anticipated. For instance: Entergy and NorthStar had initially forecast a ruling from VPUC by July 31.
On Oct. 11, the U.S. Nuclear Regulatory Commission approved transferring Entergy’s licenses for Vermont Yankee’s reactor and spent fuel storage pad. The $1,000 sale must be completed before the licenses are actually transferred.
This will be NorthStar’s first time as the lead contractor on a reactor decommissioning project.
The VPUC order noted the company has experience in decommissioning four NRC-regulated research reactors at university sites and has also performed decommissioning work at Department of Energy facilities. None of those projects resulted in notices of violation from any government agency nor any U.S. Occupational Safety and Health Administration recordable incident, according to the state commission.
But the VPUC order added: “Although NorthStar has relevant expertise in decommissioning, abatement, and cleanup projects, NorthStar has never taken the lead on a nuclear decommissioning project, nor a project of the scale and complexity of the decommissioning of the VY Station.”
The utility commissioners noted that NorthStar’s subcontractors will include Orano USA for the actual reactor decommissioning and to help manage the plant’s used nuclear fuel in dry storage and its eventual transfer to the U.S. Department of Energy. The order said Orano is experienced in dry storage and transportation of spent fuel. As the Vermont Yankee sale advanced, Orano (then called AREVA) and NorthStar in 2017 formed a joint venture, Accelerated Decommissioning Partners, for future power plant acquisition and cleanup projects.
All of Vermont Yankee’s spent fuel was placed into dry storage, in 58 casks, by August of this year.
NorthStar has a contract with Waste Control Specialists to use its disposal facility in Andrews County, Texas, for disposal of Vermont Yankee’s low-level radioactive wastes from decommissioning. NorthStar has hired an engineering firm, Burns & McDonnell, for support with engineering and the eventual termination of the NRC license. NorthStar plans to hire Haley & Aldrich as a subcontractor for nonradiological analysis work at the site.
The VPUC order cited the expertise of the subcontractors as a reason for increased confidence in NorthStar’s ability to manage the Vermont Yankee project.
Among the reasons for approving the sale, VPUC on Thursday cited sufficient financial protections in place to ensure the project will be completed, significant oversight by Vermont state agencies, the NRC determination that NorthStar is technically and financially up to the task; and broad public support for the transfer to NorthStar.
The commission had authorized several state agencies, along with a number of nongovernmental groups, to participate in its evaluation of the deal. All but one of those, the Boston-based Conservation Law Foundation, in March joined the companies in signing a memorandum of understanding and settlement agreement establishing financial and remediation terms for the sale. This week’s VPUC’s order incorporates the terms of a memorandum of understanding.
When the NRC approved the license transfers, it required NorthStar to add several guarantees of the financial viability of the decommissioning project, which are also included in the order.
NorthStar must provide the agency with proof that it has sufficient insurance for the property. NorthStar’s subsidiaries at Vermont Yankee cannot take any steps to undermine the $140 million support agreement for funding at the site, one of the components of the settlement’s memorandum of understanding, without prior approval from the NRC’s director for the Office of Nuclear Reactor Regulation. And NorthStar must secure a $4.3 million performance bond if it cannot reach agreement with DOE on reimbursement for spent fuel management costs by Jan. 1, 2022.
NorthStar and Entergy had predicted decommissioning would cost $495 million, along with $3.5 million for the eventual decommissioning of the fuel storage pad. Entergy and NorthStar told the NRC that Vermont Yankee’s decommissioning trust fund would hold $513 million as of 2019. But the two companies said in a June 2018 document filed with the federal regulator that the balance could be roughly $488 million. A prior estimate for decommissioning had been about $811 million.
To address any potential shortfall, the companies agreed to establish a $30 million escrow fund to cover radiological decommissioning and site restoration costs if necessary.
The VPUC order requires NorthStar to provide Vermont’s Attorney General’s Office, Department of Public Service, and Agency of Natural Resources with monthly summaries of all expenditures at the site.
As part of the deal, NorthStar takes possession of the plant’s decommissioning trust fund. It will keep some portion of that account when decommissioning is complete.
Entergy also plans to sell its Pilgrim nuclear power plant in Massachusetts, due to close by June 1 of next year, to Holtec International for decommissioning.
